Jack Dromey MP, Labour’s Shadow Housing Minister, responding to the letter from Newham council asking a housing association in Stoke-on-Trent to accommodate up to 500 families on housing benefit, said:

"Britain is facing a growing housing crisis.

"Soaring rents and collapsing affordable house building are making families homeless and forcing them to move hundreds of miles from home. Eric Pickles own private secretary warned privately that proposals would force families out of London. They tried to deny this but now we know the truth.

"This Government is out of touch on housing denying that rents have soared, building only 56 affordable homes in the entirety of London in the last six months. Their policies are harming families and forcing them from their homes."

Responding to Grant Shapps comments on the Today programme on BBC Radio 4 that rents are falling, Jack Dromey said:

"Grant Shapps has been consistently misleading on private rents. Private rents in London rose by seven per cent in 2011, almost double the rate of inflation on the average London wage and unaffordable for many families whether they are in or out of work."

Stephen Timms MP, Labour's Shadow Work and Pensions Minister, said:

"Savings need to be made, but these problems are an inevitable consequence of the Government’s policy. We have been warning for months that the changes to the benefits system are so badly thought through they risk needlessly uprooting thousands of families and could end up costing more than they save. Things will get much worse when the household benefit cap hits next year – at the same level in London as in the rest of the country, even though London rents are so much higher."